APPRAISING THE MEDIATING EFFECT OF CUSTOMER SATISFACTION ON SERVICE QUALITY AND CUSTOMER LOYALTY IN ADDIS ABABA CITY ADMINISTRATION: FROM A MUNICIPAL SERVICE PERSPECTIVE

Abstract

Customer loyalty refers to the continued beneficial relationship that exists between a customer and an organization. As a result, service quality plays a pivotal role in creating loyal customers. Satisfaction, on the other hand, plays a mediating role between quality and loyalty. This article is aimed at examining the “mediating effect of customer satisfaction on quality service and customer loyalty” in Addis Ababa city administration from a municipal service perspective. As a result, to analyze this projected municipal concern, data from 384 samples was collected and analyzed using descriptive and explanatory research designs. The finding revealed the direct effect of quality service on customer loyalty, but customer satisfaction is indirect. According to the SEM model, it is also suggested that customer satisfaction mediates the association between quality service and customer loyalty. Service quality promotes customer satisfaction, which enhances customer loyalty. This shows that the that the service quality model in terms of the five SERVIQUAL dimensions promotes and encourages service usage, service attitude, and service cognition, aligning with service price, service quality, and service repeatability, which helps to ensure customer loyalty in Addis Ababa city administration. This confirmed the theoretical frame of the study.